IDEAS home Printed from https://ideas.repec.org/p/net/wpaper/1217.html
   My bibliography  Save this paper

Giving the Old Platform a New Lease on Life: The Unintended Effect of Backward Compatibility on Platform Adoption Decisions

Author

Listed:
  • Il-Horn Hann

    () (Robert H. Smith School of Business, University of Maryland)

  • Byungwan Koh

    () (Haskayne School of Business, University of Calgary)

  • Marius F. Niculescu

    () (Scheller College of Business, Georgia Institute of Technology)

Abstract

We investigate the impact of backward compatibility on the adoption of multi-generation platforms. Our context is a mobile platform where platform users download services from third party providers. For each hardware platform generations, the services depend greatly on the embedded functionality. Newer handsets are backward compatible with respect to services. We develop a model to identify several drivers of adoption of subsequent generations of handsets, which include (i) the migration from older to newer generations of handsets, (ii) the relationship between services and handset users, and (iii) backward compatibility effect of handsets with respect to older generation services. Our main finding is that the backward compatibility effect has a perhaps unintended consequence; the continued use of older generation services on newer generation handsets provides a fresh lease on life for older generation handsets. This 'shot in the arm' for older generation handsets effect is due to the users who remain on or adopt an older generation platform instead of adopting a newer generation platform.

Suggested Citation

  • Il-Horn Hann & Byungwan Koh & Marius F. Niculescu, 2012. "Giving the Old Platform a New Lease on Life: The Unintended Effect of Backward Compatibility on Platform Adoption Decisions," Working Papers 12-17, NET Institute.
  • Handle: RePEc:net:wpaper:1217
    as

    Download full text from publisher

    File URL: http://www.NETinst.org/Hann_12-17.pdf
    Download Restriction: no

    More about this item

    Keywords

    Multi-generation diffusion; technology platform ecosystems; lease on life; network economics; backward compatibility;

    JEL classification:

    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:net:wpaper:1217. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Nicholas Economides). General contact details of provider: http://www.NETinst.org/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.